functional benefits help beverage segment hit hard by pandemic recover

Will Kreznick

“It’s fair to say as US consumers, we drank a bit less of our overall non-alcoholic categories in 2020”​ and “spent a lot less in terms of value per liter”​ on non-alcoholic beverages due in large part to safety restrictions that shuttered or drastically limited the reach of many food […]

“It’s fair to say as US consumers, we drank a bit less of our overall non-alcoholic categories in 2020”​ and “spent a lot less in terms of value per liter”​ on non-alcoholic beverages due in large part to safety restrictions that shuttered or drastically limited the reach of many food service venues and away-from home drinking occasions, Telford said during FoodNavigator-USA’s recent webinar, Functional Beverages, from Adaptogen & Nootropic Infused Water to Prebiotic Soda​.

He explained away-from-home soft drink volume consumption in the US fell 35.1% last year and while it was offset slightly by a 6% increase at retail, total volume still dropped 4.3%.

“The dynamic we’ve faced is a big swing in channel consumption – first from on-premise to large format retail, like supermarkets and hypermarkets and discounts, such as clubs, and of course, a massive uptick in e-commerce,”​ all of which favored higher sales of multi- or value-pack options for home consumption, which traditionally have lower margins than on-premise consumption or even impulse purchases of individual beverages, Telford said.

“The result of those swings and adverse channel mix and package mix, we spent a lot less in terms of value per liter,”​ he said.

For beverage players to recover and rebuild sales, they will need to re-establish value, which is where functional beverages can play a “massive role,”​ Telford said, pointing to their track record before and during the pandemic.

“If refreshment and flavor drives volume for packaged beverages and [carbonated soft drinks] and flavored water, it’s increasingly functionality that drives value,”​ he explained.

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